Just curious....does the IRS publish, or does anyone know, the approximate number of applications made under the Voluntary Compliance Program (VCP) during 2003 or any other period?

100? 1,000? 10,000?

Does anyone know if Treasury Regulations, IRS Code, IRS Procedures, Notices, Rulings etc., references how distributions from a mandatory contributory DB plan should be calculated? (i.e., is it prorated between the ER and EE amounts) Also, If a participant is in pay status (assume J&S 50% calculation) and both the participant and beneficiary die before the total employee contributions are distributed. Is there a special calculation for the contingent beneficiary or participant's estate?

I have heard contradictory information and was hoping that someone would help me clarify this point. We have a rather young participant in our company 401(k) plan who defers up to his 415 limits $13,000 for 2004. He works a part time job at another firm and is able to contribute to a 401(k) there as well. It is my understanding that he can contribute to both plans up to the 415 limit as long as he does not exceed the 402(g) limits of $40,000 or 25% of his income. What are your thoughts? Any direction would be greatly appreciated.

Assume that a plan document provides that a plan will pay certain eligible expenses, e.g., reasonable plan administration expenses. The annual administration bill is presented to the plan sponsor. The plan sponsor pays the bill and then seeks reimbursement from the plan (in lieu of presenting the bill to the plan and then having the plan write a check). If the plan reimburses the plan sponsor, does such reimbursement result in a prohibited transaction and, if so, is there an applicable exception.

Also, what limits, if any, apply to how far back a plan sponsor may request reimbursement. For example, suppose that the plan sponsor has paid the past four annual administration bills and now would like the plan to reimbursement it for all four bills. Can the plan simply write a single check to reimburse the plan sponsor for four years of plan administration? What if the plan sponsor had requested reimbursement for eight years? Ten years?

Thanks so much for your help.

Assume that a plan document provides that a plan will pay certain eligible expenses, e.g., reasonable plan administration expenses. The annual administration bill is presented to the plan sponsor. The plan sponsor pays the bill and then seeks reimbursement from the plan (in lieu of presenting the bill to the plan and then having the plan write a check). If the plan reimburses the plan sponsor, does such reimbursement result in a prohibited transaction and, if so, is there an applicable exception.

Also, what limits, if any, apply to how far back a plan sponsor may request reimbursement. For example, suppose that the plan sponsor has paid the past four annual administration bills and now would like the plan to reimbursement it for all four bills. Can the plan simply write a single check to reimburse the plan sponsor for four years of plan administration? What if the plan sponsor had requested reimbursement for eight years? Ten years?

Thanks so much for your help.

How does everyone handle the case of braces where the date incurred for the medical service is 2003 but payments are made over a two year period - 2003, 2004 and 2005. Would you reimburse expenses incurred in 2003 but paid in 2004?

Thanks.

When a participant buys contact lenses online or via telephone, is the shipping and handling charges reimbursable? Thanks

I'm interested in any LAW guidance on this if anyone found any. I spent 15 minutes using the SEARCH function and came up empty (although I did read a lot of interesting stuff!)

Not interested in the "Check your plan document" kind of reply, but actual knowledge of (citation if possible) an IRS position or LAW.

Thanks.

Can health club memberships ever be an eligible medical expense under a 125 Plan, even if it is medically necessary and prescribed by a doctor? Thanks, Joe

Examples of IRS responses to requests for waiver of the 60-day limit on rollovers.

PLR 200401025

PLR 200401024

PLR 200401023

Payroll Admin. at Company has not processed the 2003 W-2's. She wants to know if she can adjust or reduce the amount of deferrals on the W-2 from 13,000 to 12,000????

The 1099-R issued in 2004 for the distribution of the Excess Deferral and income should take care of the adjustment ????

Thanks for your help.

Also, the match on the excess deferral would this be treated as a forfeiture???

we have an individual on COBRA family and has a son who is a full time student. AT what age is he no longer eligible to be on her plan? And if he is no longer a full time student-at what age can he stay on her plan?

thank you

we have an employee that we recently terminated-they have asked to review our 401k documents-are they permitted now that they are no longer an employee?

One 501©(3) entity (entity A) sponsors a 401(k) plan and acquires 100% of the assets of another 501©(3) entity (entity B) that sponsors a 403(b) plan. Entity B will keep it's own tax ID#. Entity A wants Entity B to keep it's 403(b) plan. There is a special rule for coverage that says, "For purposes of the 401(k) plan's coverage, the employees eligible to contribute to the 403(b) plan are excludible if:

1. no employees of the tax exempt entity is eligible to participate in the 401(k) plan and

2. 95% of the employees of the non-exempt entity are eligible under the 401(k) plan."

This rule does not seem to apply since neither entity is "non-exempt". So would they not be able to exclude the employees of the other entity when doing coverage?

Thanks

401(k) PS combo plan year is calendar year. For 2003, is it possible for a catch-up eligible participant with, say, $80,000 comp to have a PS allocation of $40,000 and a catch-up salary deferral of $2,000? (Assume that company 404(a) limit is not exceeded.)

I've seen plenty of examples of $28,000 PS and $12,000 SD + $2,000 catch-up SD, but my reading of the 1.414(v) regs seems to allow the $40,000 PS + $2,000 SD, because Sec. 415 is one of the statutory limits that can trigger a catch-up contribution.

Unfortunately, the 1.414(v) reg examples are not on point.

Has anyone seen the $40,000 + $2,000 in use? Seen any expert guidance?

Thanks,

Dave Peckham

I am interested in how you would handle a QDRO that states that if the plan does not fully subsidize the QJSA/QPSA, then the cost would be charged pro-rata to the participant and AP, e.g., the portion of the cost charged to the AP would be the actual charge multiplied by a fraction: (1) the value of benefits awarded to the AP as of the valuation date on which the award of benefits is measured in the DRO divided by (2) the value of Participant's benefits as of (i) the date of the charge or (ii) the date of distribution (the DRO would include (i) or (ii), not both).

Would you reject it? Any thoughts or comments?

Is the deferral limit still on a participant basis versus a plan basis?

Example- Participant works for 2 different corporations. He/She makes $25,000 at each corportation. The individual is age 40. Is the limit $13,000 or $26,000? (Assume 2004 year).

I have a participant in our Cafeteria Plan whose husband is self-employed and works out of their home. They still take their daughter to a full-time day care operation. Can the participant run the day care costs through our cafeteria plan?

No. Because the husband works out of the home, the child-care option is not available. :angry:

Yes, since the child is sent to a organized child-care facility the employee should be able to run the costs through the plan.

Treas. Reg 1.401(k)-1(d)(2)(iv)(3) states that one of the deemed hardship standards is for the

payment of tuition, related educational fees, and room and board expenses, for the next 12 months of post-secondary education for the employee, employee's spouse, children, or dependants (as defined in section 152).

Does this mean that if a participant submits a past due bill for college expenses, it is not a qualifying hardship because it is not for the payment of tuition for the next 12 months?

I have a client that is asking if she can run her husbands disability insurance through her flex fund under individual premium. I have been told by a coworker that it is allowable, but not benificial as the benefits will be taxed if they do so. Has anyone come across this and seen any difference?